Private universities, colleges risk permanent closure

About 60 PHEIs closed down last year primarily due to financial issues and lower enrolments


PRIVATE higher education institutions (PHEIs) in the country face potential collapse if new student enrolments continue to drop.

The National Association of Private Educational Institutions president Assoc Prof Elajsolan VM Mohan said about 60 PHEIs closed down last year primarily due to financial issues.

From more than 600 PHEIs in 2013, only 436 were left by the end of 2019.

“Since the start of the Covid-19 pandemic, there has been a reduction in the number of student enrolment with the overall drop from 20% to 50%.

“The continued increase in Covid-19 cases would further affect enrolment. If the current situation continues, more PHEIs will be closed down or become dormant,” he told The Malaysian Reserve (TMR).

Effective Jan 1, 2021, all international students, except those from the UK, are allowed to enter Malaysia to continue their studies.

In February, TMR reported that although Malaysian HEIs could enrol foreign students since January, slow visa approvals and students’ concern over the pandemic had put a brake on one of the HEIs’ most valuable revenue sources.

Elajsolan said the fear of Covid-19 is a bigger problem compared to visa delay issue.

“PHEIs used to receive returning foreign students, but with the number of Covid-19 cases on the rise locally, students are not coming in.

“While waiting for the situation to stabilise, many of these students have started taking their classes online,” he added.

Elajsolan acknowledged that students may not be paying fees as they need to work to support their parents who have been financially affected by the pandemic.

“These factors have greatly affected the cashflow of the institutions for more than a year now.

“Sadly, there is no stimulus package allocation for the private education sector,” he said.

Echoing the sentiment, Malaysian Association of Private Colleges and Universities president Datuk Dr Parmjit Singh said while visa approvals have improved and students have come and undergone the quarantine process, the enrolment numbers have fallen.

“Before Covid-19, 30,000 foreign students registered with PHEIs annually, which was 30% to 40% of the total enrolment but now, the number has dropped between 20% and 30%, while local student enrolment has also decreased between 10% and 20%,” he said.

Malaysia University of Science and Technology professor Dr Geoffrey Williams said the uncertain operating environment goes beyond the concerns of financial restraints.

Williams, who is also the director of Williams Business Consultancy Sdn Bhd, said the quality of education will decline, while job losses and informalisation of academic employment will increase.

Sessional or hourly staff have increased, part-time staff have been converted to hourly paid staff and full-time staff have been moved to part-time. Meanwhile, foreign staff, in particular, have been laid-off.

“Hourly rates for sessional staff have also been cut and I have heard of cases where faculty members are being offered RM60 per hour instead of the RM120 standard rate,” he told TMR.

This has led to many lecturers, including those with Doctor of Philosophy qualification, to take up part-time tutoring jobs even for high school level.

Williams noted that there have been news about international franchise universities being sold, which is a warning sign of real problems brewing within the industry.

With Covid-19 cases in Malaysia increasing, the question remains on when and if campuses will be reopened, and whether there will be any new intake in the coming year.

“Just when we thought that we were out of the woods, we got another lockdown. This is very challenging for revenues and longer-term planning and worsens the financial impact,” Williams said.

He added that it was forecast that international student enrolment might fall by 50% this year and since many are graduating and going home, the total enrolment will continue on a downward trend.

“This may be permanent because of the fast-changing online environment,” he concluded.